Fitch downgrades Indika Energy

Fitch Ratings said it downgraded the long-term foreign- and local-currency issuer default ratings of Indika Energy Tbk. to B from B+.

Indika’s senior unsecured notes also were downgraded to B from B+ with recovery rating of RR4.

The outlook remains negative.

The downgrades reflect an expectation of sustained weak credit metrics, largely as a result of lower dividend inflows from its coal mining company, PT Kideco Jaya Angung, as coal prices are likely to remain weak, Fitch said.

The company has made some progress with trimming costs and capital expenditures that drain its cash flows, the agency said.

The negative outlook considers further challenges that the company may face in refinancing the bonds due in 2018 and 2023 if coal prices remain subdued for an extended period, Fitch said.

This economic environment also raises the possibility that the company’s interest burden would increase substantially when it refinances its long-term debt, the agency added.

S&P lowers HEP to negative

Standard & Poor’s said it revised the outlook on Hrvatska Elektroprivreda (HEP) to negative from stable.

The agency also said it affirmed the company’s BB- long-term corporate credit rating, along with the BB- rating on its senior unsecured debt.

The outlook revision a similar outlook revision on Croatia, S&P said.

The negative outlook also reflects a view that the Croatian government’s ability to provide support to HEP in a financial stress scenario could weaken, the agency said.

S&P said it considers HEP to be a government-related entity.

The company’s stand-alone credit profile is assessed at B+, reflecting its fair business risk profile and aggressive financial risk profile, the agency said.

Moody’s ups Afreximbank view to stable

Moody's Investors Service said it changed the outlook on the Baa2 long-term issuer rating of African Export-Import Bank (Afreximbank) to stable from negative and affirmed the Baa2/P-2 long- and short-term ratings.

Moody’s said the key drivers for the outlook change to stable are: (a) The general capital increase launched in September 2014 which is contributing to a replenishment of the bank's capital buffer, following an erosion of its capital adequacy ratio from 31% in 2009 to 20% in 2013; and (b) evidence of strong shareholder support emphasized by received payments and written commitments of existing and new shareholders in the share offering.

S&P: IG Seismic, Geotech on negative watch

Standard & Poor’s said it placed the B long-term global scale corporate credit rating on IG Seismic Services plc and Geotech Seismic Services on CreditWatch with negative implications.

The agency also said it placed the ruA- Russia national scale rating on Geotech on CreditWatch negative.

The CreditWatch placement reflects a view that IG Seismic’s liquidity has weakened in the past few months, S&P said.

The company used a meaningful portion of available liquidity sources to service its debt maturities in the second quarter of 2015, the agency said, and its capital structure may have shifted toward shorter-term financing.

The company also is currently negotiating to refinance its short-term maturities, S&P added. If successful, this could allow the company to restore its liquidity to adequate as defined in the agency’s criteria.

However, S&P said it does not expect IG Seismic to be unable to secure the rollover of its short-term bank lines.

Challenging industry conditions also are expected to continue in the medium term, which could lead to further weakening of the companies’ leverage and liquidity, the agency said.

Moody’s rates ICBC Argentina notes B1/Aaa.ar

Moody's Latin America said it assigned a B1 global scale rating and a Aaa.ar national scale rating to Industrial and Commercial Bank of China (Argentina) SA's expected issuance of up to ARS 500 million, which will be due in 18 months, under the bank's $250 million medium-term note program.

The outlook is negative.

Moody’s said the B1 global local currency debt and deposit ratings derive from the bank's caa1 baseline credit assessment and the assessment of a high probability of parental support to be provided by its main shareholder, Industrial and Commercial Bank of China Ltd. (A1 stable, baa2).

S&P rates Kansas City Southern notes BBB-

Standard & Poor’s said it assigned a BBB- rating to Kansas City Southern Railway Co.’s senior unsecured notes.

The notes are guaranteed by the company’s parent, Kansas City Southern.

The proceeds will be used to repay the company’s outstanding commercial paper, for share repurchases by Kansas City Southern and for general corporate purposes, S&P said.

The ratings reflect the favorable fundamentals of the North American freight railroad industry, given the limited competition from alternate modes of commercial-freight transport for certain commodities, formidable barriers to entry and moderate cyclicality, the agency said.

The ratings also consider the company’s solid competitive position and good operating efficiency, S&P said.

Despite headwinds from declining fuel-surcharge revenue, the weak Mexican peso and the volatile climate for energy-related products, the company’s revenues and earnings are expected continue benefitting from the positive pricing environment and management’s ongoing focus on efficiency improvements, the agency said.

Fitch rates Kansas City Southern notes BBB-

Fitch Ratings said it assigned a rating of BBB- to the $500 million notes to be issued by Kansas City Southern’s subsidiaries primary U.S. operating entity, Kansas City Southern Railway Co.

The ratings on Kansas City Southern and its two primary subsidiaries, Kansas City Southern Railway and Kansas City Southern de Mexico are unaffected.

The issuance will represent a senior unsecured obligation of Kansas City Southern Railway and will be guaranteed by Kansas City Southern, Fitch said.

The proceeds will be used to repay outstanding commercial paper and for general corporate purposes, including repurchasing shares, the agency said.

Fitch said it expects the incremental debt from the transaction to lead to increased total adjusted debt-to-EBITDAR of about 2.6x to 2.7x by year-end, declining modestly thereafter.

The ratings are supported by the company’s solid operating margins, steadily increasing revenues and moderate leverage, the agency said.

The ratings also consider a view that Kansas City Southern’s credit profile will improve in the coming years, propelled by growth opportunities in Mexico and further operating margin expansion, Fitch said.

S&P rates Shanghai Electric Power notes BBB

Standard & Poor's said it assigned a BBB long-term corporate credit rating to Shanghai Electric Power Co. Ltd., along with a cnA long-term Greater China regional scale rating.

S&P also said it assigned a BBB long-term issue rating and cnA long-term Greater China regional scale rating to the proposed issue of senior unsecured notes that Shanghai Electric Power Finance Ltd. will issue and Shanghai Electric Power will unconditionally and irrevocably guarantee.

The outlook is stable.

Shanghai Electric Power is a one of the three major power generation companies serving the city of Shanghai and owns 100% of SEP Finance, S&P said.

The company is viewed as a strategically important subsidiary of state-owned China Power Investment Corp., the agency said.

Based on its ownership, Shanghai Electric Power’s ratings reflect a three-notch uplift from its stand-alone credit profile of BB, S&P said, as the company will benefit from government support if needed.

The ratings also consider the company’s good asset- and geographical-diversity, the agency said.

Shanghai Electric’s stand-alone credit profile reflects its aggressive overseas expansion appetite and weak cash flows stemming from significant debt-funded capital expenditure, S&P added.

Fitch rates Shanghai Electric Power notes BBB+

Fitch Ratings said it published Shanghai Electric Power Co., Ltd.’s long-term foreign-currency issuer default rating at BBB+, along with a senior unsecured rating at BBB+.

Fitch also said it assigned an expected rating of BBB+ to the proposed dollar-denominated notes to be issued by Shanghai Electric Power Finance Ltd. (SEP Finance), which are guaranteed by Shanghai Electric.

The outlook is stable.

SEP Finance is 100%-owned by Shanghai Electric, Fitch said.

The ratings are credit-linked, but not equalized with its 59.8% parent – China Power Investment Corp., one of China's five largest fully stated-owned power generation groups, the agency said.

This is because Shanghai Electric Power is one of China Power’s most strategically important subsidiaries and one of only three power suppliers in Shanghai, Fitch said.

Shanghai Electric Power’s standalone credit profile is constrained to the BB category by its asset concentration and forecasted negative free cash flow due to its high capital expenditure program, the agency said.

Fitch said it expects geographic diversification to improve once its projects in western China and overseas are completed, although eastern China is still likely to account for more than 70% of total capacity by 2018.

Moody’s: Shanghai Electric Power, bond Baa2

Moody's Investors Service said it assigned a Baa2 issuer rating to Shanghai Electric Power Co. Ltd. (SEP).

At the same time, the agency assigned a provisional Baa2 senior unsecured rating to the proposed bond to be issued by Shanghai Electric Power Finance Ltd., a wholly owned subsidiary, unconditionally and irrevocably guaranteed by SEP.

The outlook is stable.

Proceeds will be used primarily for general corporate purposes and working capital.

Moody's will remove the provisional status of the bond rating upon completion of the issuance on satisfactory terms.

SEP's Baa2 rating combines its standalone credit strength and a three-notch uplift based on strong expected support from its parent China Power Investment Corp. (CPI, unrated).

"SEP's standalone rating primarily reflects its solid market position in Shanghai, quality power generation assets with a high level of operational efficiency, and ongoing operational support from the parent company," Moody's vice president and senior analyst Ada Li said in a news release.

Fitch: Zhuhai Huafa bond BBB

Fitch Ratings said it assigned long-term foreign- and local-currency issuer default ratings of BBB to Zhuhai Huafa Group Co., Ltd. with stable outlook.

Fitch also said it assigned an expected BBB rating to a proposed Chinese yuan-denominated senior unsecured bond to be issued by Huarui Investment Holding Co. Ltd.

Huarui is an indirect wholly owned subsidiary of Zhuhai Huafa.

The bond will be unconditionally and irrevocably guaranteed by Zhuhai Huafa.

The bond constitutes direct, unconditional, unsubordinated and unsecured obligations of Huarui, Fitch said, and will rank pari passu with other present and future unsecured and unsubordinated obligations.

The proceeds will be used for general corporate purposes, the agency said.

Zhuhai Huafa’s ratings are credit-linked to the Zhuhai municipality, Fitch said, reflected by the municipality’s 100% ownership, strong municipal oversight of its financials and strategic importance of Zhuhai Huafa’s public-sector business to the municipality.

The agency said it believes these factors result in a high certainty of extraordinary support from the municipality, if needed.

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